REGIONALISM AND AFRICA'S DEVELOPMENT

Also by S. K. B. Asante

AFRICAN DEVELOPMENT: Adebayo Adedeji's Alternative Strategies

PAN-AFRICAN PROTEST: West Africa and the Italo-Ethiopian Crisis

POLITICAL ECONOMY OF REGIONALISM IN AFRICA: A Decade ofthe Economic Community ofWest African States (ECOWAS)

Regionalism and Africa's Development Expectations, Reality and Challenges

s. K. B. Asante Senior Regional Adviser in Economic Cooperation and Integration and Coordinator, Southern Africa Desk and Task Force Cabinet Office, Economic Commissionfor Africa Addis Ababa, Ethiopia

Foreword by K. Y. Amoako United Nations Under·Secretary-General and Executive Secretary ofthe Economic Commissionfor Africa

First published in Great Britain 1997 by MACMILLAN PRESS LTD Houndmills, Basingstoke, Hampshire RG21 6XS and London Companies and representatives throughout the world

A catalogue record for this book is available from the British Library.

ISBN 978-1-349-25781-2 ISBN 978-1-349-25779-9 (eBook) DOI 10.1007/978-1-349-25779-9

First published in the United States of America 1997 by

ST. MARTIN'S PRESS, INe., Scholarly and Reference Division, 175 Fifth Avenue, New York, N.Y. 10010

ISBN 978-0-312-17697-6

Library of Congress Cataloging-in-Publication Data Asante, S. K. B. Regionalism and Africa's development: expectations, reality, and challenges / S.K.B. Asante; foreword by K. Y. Amoako. p. cm. Includes bibliographical references and index. ISBN 978-0-312-17697-6 (cloth) I. Africa-Economic policy. 2. Africa-Economic integration. 3. Regionalism-Africa. I. Title. HC800.A854 1997 337.l'6--dc21 97-18971

© S. K. B. Asante 1997 Foreword © K. Y. Amoako 1997 Softcover reprint of the hardcover 1 st edition 1997

CIP

All rights reserved. No reproduction, copy or transmission of this publication may be made without written permission.

No paragraph of this publication may be reproduced, copied or transmitted save with written permission or in accordance with the provisions of the Copyright, Designs and Patents Act 1988, or under the terms of any licence permitting limited copying issued by the Copyright Licensing Agency, 90 Tottenham Court Road, London W I P 9HE.

Any person who does any unauthorised act in relation to this publication may be liable to criminal prosecution and civil claims for damages.

The author has asserted his right to be identified as the author of this work in accordance with the Copyright, Designs and Patents Act 1988.

This book is printed on paper suitable for recycling and made from fully managed and sustained forest sources.

10 9 8 7 6 5 06 05 04 03 02 01

4 3 2 I 00 99 98 97

For my three lovely granddaughters: Akua and Abena Adu-Nyarko and Afuah Agyeiwa Asante

Contents

List of Tables ix List of Abbreviations and Acronyms x Foreword by K.Y. Amoako, United Nations Under-Secretary-General and Executive Secretary of the Economic Commission for Africa Xli

Preface xiv

1 Introduction: Africa and the World of Regionalism: Oldand New The First Wave of Regionalism The Second Wave of Regionalism Africa and the Brave New World of Regionalism

Part I Regionalism in Africa: The First Phase

2 Regionalism as a Key Element of African

2 3 8

Development Strategy 17 The Term 'Economic Integration' 18 'Regional Cooperation' and 'Regional Integration' 20 Stages or Different Forms of Integration 21 Theoretical Background 23 Politics, Economics and Regionalism 25 The Rationale for Regionalism in Africa 28 Pan-Africanism and Continental Economic Integration 32 The 1960-70 Period: Modest Beginnings of Economic Integration 34 The 1970s and 1980s: Euphoria for Economic Integration 37

3 Experience of Regionalism in Africa: A Critical Appraisal 45 Between Standstill and Progress? 47 Experience in Market Integration 47 Performance in Positive Integration/Policy Harmonization 50 Limited Progress in Infrastructural Integration 53 Inadequate Performance in Monetary and Financial Integration 55 Poor Implementation Record 56

Vll

viii Regionalism and Africa 's Development

4 Interlocking Problems of African Regionalism 62 Is Market Integration Appropriate? 62 Management of Regional Economic Integration 71

Part 11 Into the 1990s: The New Phase of Regionalism in Africa

5 New Regional Initiatives in Africa 87 African Economic Community: A New Hope for Africa? 89 The Abuja Treaty: Principles, Institutions and Decision Making Processes 91 Approach and New Issues Faced by Abuja 98 The Abuja Treaty: Issues of Implementation 104 The Cross-Border Initiative 108 Vertical Integration Schemes 114

6 New Challenges to African Regionalism 118 The Challenge of Trading Blocs 118 The Challenge of the Lome Convention 125 The Challenge of Structural Adjustment Programmes: A 'Plus' or a 'Risk'? 129 The Challenge of Democratic South Africa 134

7 Regionalism in Africa: Towards a New Direction 138 Towards a New Approach to Regional Integration 138 Strengthening National Institutional and Managerial Capacity 149 Strengthening the Institutional Capacity of the Economic Communities 155 Crucial Factors in Implementing the AEC Treaty 163 Enhancing South-South Cooperation 166

8 Conclusion: Time for Action 169 Policy Responses to the Emerging Regional Age 170 Towards Sustainable Developmental Regionalism 173 The Way Forward 177

Notes 180 Select Bibliography 193 Index 202

List of Tables

Table 2.1 African Economic Integration and Cooperation Groupings and their Membership 42

Table 3.1 Intra-regional Trade as a Percentage of Total Exports of Regional Group 48

Table 3.2 Some Economic Indicators for Sub-Saharan Africa 59 Table 4.1 Customs Duties as Percentage of Total Tax Revenue in

Sub-Saharan Africa, 1969 and 1980 68 Table 6.1 Trends in EC Trade with Developing Countries,

1976-92 122

List of Abbreviations and Acronyms

AAF-SAP

ADB AEC AMU APEC APPER ASEAN CACH CACM CBI CCH CEAO CEMAC

CEPGL COMESA EAI ECA ECCAS ECLAC

ECOWAS ECSC EEC EFfA EU FAL FfAA GATT IMF LAFfA LPA

African Alternative Framework to Structural Adjustment Programmes for Socio-economic Recovery and Transformation African Development Bank African Economic Community Arab Maghreb Union Asia-Pacific Economic Cooperation African Priority Programme for Economic Recovery Association of South-East Asian Nations Central African Clearing House Central American Common Market Cross-Border Initiative COMESA Clearing House Communaute economique de l' Afrique de l'Ouest Communaute economique et monetaire de I' Afrique Centrale Communaute economique des Pays des Grands Lacs Common Market for Eastern and Southern Africa Enterprise for the Americas Initiative Economic Commission for Africa Economic Community of Central African States Economic Commission for Latin America and the Caribbean Economic Community of West African States European Coal and Steel Community European Economic Community European Free Trade Association European Union Final Act of Lagos Free Trade Area of the Americas General Agreement on Tariffs and Trade International Monetary Fund Latin American Free Trade Association Lagos Plan 0/ Action

x

MRU NAFTA OAU PTA

List 0/ Abbreviations and Acronyms

Mano River Union North American Free Trade Agreement Organization of African Unity Preferential Trade Area of Eastern and Southern African States

Xl

SADCC SADC

Southern African Development Coordination Conference Southern African Development Community

SEM SAP TNC UDEAC UEMOA UNCTAD UN-NADAF

Single European Market Structural Adjustment Programme Transnational Corporation Union douaniere et economique de l' Afrique Centrale Union economique et monetaire ouest-africaine United Nations Conference on Trade and Development United Nations New Agenda for the Development of Africa in the 1990s

UN-PAAERD United Nations Programme of Action for African Economic Recovery and Development

WTO World Trade Organization

Foreword

No publication could be as timely as Professor Asante's Regionalism and Africa' s Development: Expectations, Reality and Challenges . This comprehensive and thought-provoking resource comes at a time ofheightened interest in regional integration, the emergence of trading blocs in Europe, the Americas and Asia, and an increasing awareness among African countries of the imperative of integration for growth and development. Professor Asante's well-researched work provides the historical relevance, contextual background, theoretical constructs, and persuasive rationale for economic regionalism in Africa. His balanced representation of the issues and prescriptions for a 'new direction' set the stage for a greater understanding of the dynamic potential of regional cooperation and integration.

Regionalism and Africa's Development makes a significant contribution to the body of practical and theoretical knowledge that support regional integration - a process which will enable African countries to overcome the constraints of small markets, increase intra-African trade, and achieve economies of scale in production. The concepts Professor Asante examines in this book occupy the centre stage of the Economic Commission for Africa's (ECA) work programme. ECA advocates economic integration and considers it key to Africa's development.

Professor Asante proposes measures to expedite the implementation process of the Abuja Treaty; strengthen subregional organizations and activities; develop cross-border trade liberalization; develop robust transport, communications, and energy infrastructures; and build and enhance agriculture and business production capacities. Virtually all recent internal and external action programmes and guidelines for Africa consistently reflect the tenets of subregional and regional integration that he highlights: the Lagos Plan of Action (1980), the Uni ted Nations Programme of Action for African Economic Recovery and Development (1986-90) (UN-PAAERD), the United Nations New Agenda for the Development of Africa in the 1990s (UN-NADAF), and the Cairo Agendafor Action (1995), to name a few.

The measures detailed in this book support ECA's new core work programme (1996-200 I) and set the stage for successful and expeditious regional cooperation and integration throughout the continent. Currently undergoing a renewal process to create a more responsive and tactical organization, ECA maintains a comparative advantage in institution-building within the integration framework. We have created several sponsored

xii

Foreword Xlii

institutions in Africa and have catalysed the subregional integration process by creating requisite organizations throughout Africa, such as the Economic Community of West African States (ECOWAS) and the Preferential Trade Area of Eastern and Southern African States (PT A), now transformed into the Common Market for Eastern and Southern Africa (COMESA).

This pivotal volume makes a strong case for mobilizing support for economic integration at all levels, for ensuring adequate financial support for Africa's integration from within the continent, and for a committed constituency for Africa's economic future. It proposes measures towards rapid diversification of African countries' exports, increased export processing, expansion of intra-African trade, promoting South-South trade, and ration­alization and revitalization of African integration process as some of the relevant policy responses to the emerging regional age. While one may not accept every idea or rationale that the author has proffered, we can all agree that he has c1early and concisely articulated the benefits and challenges of African regionalism and has defined a distinctly African strategy.

Professor Asante's approach will surely stimulate greater attention of scholars, researchers, and policy makers, particularly the member states of the ECA, to further intellectual exploration ofthe prospects and the promise of regionalism in the 1990s and beyond. I applaud Professor Asante's construction of a contemporary and challenging book that can assist our understanding of and interest in regionalism in Africa.

Dr K.Y. Amoako United Nations Under-Secretary-General

and Executive Secretary of the Economic Commission for Africa

Preface

Regional and subregional economic cooperation and integration is widely recognised and accepted as a necessary condition for the long-term sustainable development of African countries. The African countries themselves and the international community, in various convergent policy declarations and statements, have underlined intra-African economic integration and cooperation as indispensable for the socio-economic transformation of the continent. The consolidation of the African economic space, in particular, through the formation of subregional common markets leading eventually to a continental common market and economic community has been perceived as a primary goal. This objective has provided the main rationale for the establishment of regional and subregional economic cooperation and integration groupings in Africa.

By the 1980s, frustration with the growing gap between the high initial expectations and the actual achievements of the first phase of integration considerably reduced the interest in economic cooperation and integration as a policy issue. As the economic crisis deepened, concern over national stabilisation and structural adjustment gradually began to take precedence over subregional and regional considerations. Member states of the economic communities resorted to purely national measures of short-term crisis management thereby often compromising their obligations to their respective groupings.

Recently, however, following the new wave of regional integration in the early 1990s, the question of economic integration is once again at the top of the policy agenda in almost all the subregions of Africa. This is partly in line with recent worldwide trends which have increased the force ofthe economic argument in favour of regional solidarity. Integration is being looked at again as a way to achieve faster, more diversified, and sustainable economic growth that would enable Africa to effectively respond to the challenges of the emerging world of trading blocs, rapid changes in technology and the globalization of world production. Hence the reassessment, in the early 1990s, ofthe entire integration project, which has led to fresh initiatives resulting in the creation of new regional and subregional economic integration schemes, revitalization of the existing economic communities and transformation of others into more dynamic groupings that would enable them to adjust to the rapidly changing economic landscape in many regions of the world.

xiv

Preface xv

This book is concerned with the objectives, chaIlenges and prospects of the two distinct phases of regionalism in Afriea whieh have hitherto not received adequate attention in the various studies on economic cooperation and integration in Africa. The impetus for exploring the themes of this volume comes from several significant sources. First and foremost, the assumption of office by Dr K. Y. Amoako as United Nations Under-Secretary­General and Executive Secretary of the Economic Commission for Afriea (ECA), in July 1995, has given a renewed emphasis on economic integration not only as a major mandate of the ECA but also as a priority issue in Africa's development strategy. Promotion ofregional economic cooperation and integration has been identified as one of the five new programme directions offered as the foci of the ECA's work over the next six years, 1996-200 I. As Senior Regional Adviser in Economic Cooperation and Integration at the Cabinet Office of the Executive Secretary and Coordinator ofthe ECA-Multidisciplinary Regional Advisory Group (ECA-MRAG) for three consecutive years (1992-4), I considered it necessary to produce a book setting out the lessons learnt in regionalism in Africa and posing questions of a theoretical and policy nature. Through this modest effort, I hope to make some contribution to the achievement ofthe ECA's renewal objective which is to serve Africa better. It is indeed proper and fitting therefore that Dr Amoako has consented to write the Foreword to this study.

The sustained impact whieh my annual special two-week course module on Economic Cooperation and Integration in Africa has had on the students of the Diploma and Masters programmes of the United Nations African Institute for Economie Development and Planning (IDEP); the Institute of Diplomacy and International Studies (IDIS) at the University of Nairobi, Kenya; the Zambia Institute for Diplomatie Studies (ZIDS); the International Relations Institute of Cameroon (IRIC) and the Legon Centre for International Affairs (LECIA) at the University of Ghana, has been more than sufficient to rekindle my interest in doing further work towards the publication of this volume. Similarly, the favourable reaction to my annual series of lectures and training workshops on regionalism and Africa's development to both staff and graduate students of such South African universities and research centres as the University ofPretoria, where I serve as Extraordinary Professor, and the Africa Institute of South Africa, as Fellow, greatly inspired me to write this book.

Furthermore, the various technical advisory and training missions to ECA member states, intergovernmental organizations, and the regional and subregional economie communities on substantive issues in economic integration, coupled with my participation in the revitaIization of the Economic Community of West African States (ECOWAS) as a member of the

XVI Regionalism and Africa's Development

Committee of Eminent Persons for the Revision of the ECOW AS Treaty headed by Nigeria's former Head of State, Dr Yakubu Gowon (May 1991 to June 1992), and in the drawing up of the treaties establishing the Common Market for Eastern and Southern Africa (COMESA) (1992-3) and the African Economic Community (ABC) (1989-90) - all this stimulated and sharpened my interest in writing this book.

I owe a debt of gratitude first, to the Ministers, Permanent, and Principal Secretaries and Directors ofMinistries ofPlanning and/or African Regional Integration whose requests for technical advisory and training services provided the opportunity to study cIosely the management and challenges of economic integration at the national level which has hitherto been neglected; Secretaries-General and Executive Secretaries of the African regional economic communities and directors of the institutes who invited me on several occasions to assess their economic integration process, identify problems and prospects of their management of regional economic integration and to provide training programmes on the technology of regional cooperation and integration. Special thanks are due to the following who, among others, initiated the various requests and invitations: Hon. Hidipo Hamutenya, Minister of Trade and Industry, and Hon. Dr Mose P. Tjitendero, Speaker of the National Assembly, both of the Republic of Namibia; Mr F.M. Kuindwa, Permanent Secretary, Office of the Vice-President and Ministry of Planning and National Development, Republic of Kenya; Hon. Dean M. Mongomba, former Deputy Minister of Planning and Development Cooperation, Office of the President, Republic of Zambia; Dr Louk de la Rive Box, Director of the European Centre for Development Policy Management based in Maastricht, The Netherlands; Dr Jeggan C. Senghor, Director of IDEP; Professor Joshua Olewe-Nyunya, Director of IDIS, University of Nairobi; Dr Bingu Wa Mutharika, Secretary-General of COMESA; Dr Abbas Bundu, former Executive Secretary of ECOW AS; Dr Kaire Mbuende, Executive Secretary ofthe Southern African Development Community (SADC); Professor Geert de Wet, Head, Department of Economics, University ofPretoria, Pretoria, South Africa; Dr Denis Venter, Executive Director, Africa Institute of South Africa, Pretoria, South Africa; and Dr Garth le Pere, Executive Director, Foundation for Global Dialogue, Johannesburg, South Africa.

I am extremely grateful to Professor H.M.A. Onitiri, who showed special interest in the preparation of this volume at the very beginning, critically reviewed its Contents page and provided the relevant material of his own work in this area. I should also like to express sincere thanks to my colleagues Dr MJ. Balogun, Senior Regional Adviser in Public Sector Management, and Professor W.A. Ndongko, Senior Regional Adviser in Macro-econornics

Preface xvii

and Policy Reform, both of ECA-MRAG, who participated in our special multidisciplinary missions to Cameroon, Ghana, Kenya, Namibia, Seychelles, South Africa, Sudan, Tanzania, Zambia and Zimbabwe, and to the headquarters of COMESA, ECOW AS and SADC. These two colleagues provided an intellectual atmosphere, at once stimulating and relaxed, that creates the ideal conditions for research.

I am greatly indebted to Ms Sissay Tadesse and Mrs Charlotte Mfasoni who typed the manuscript with their usual speed, care and professional skilI, who I always have in mind as my first audience, and whose many kindnesses are part of the background to my work. I am also grateful für secretarial and other much-valued assistance, at various stages ofthe project, to Ms Roman Alemayehu of ECA-MRAG, Mrs Nancy Wanjala of the Institute of Diplomacy and International Studies, University of Nairobi, Kenya and Ms Noelle Lawson of the Foundation for Global Dialogue, Johannesburg, South Africa.

Most of all I wish to thank my dear wife, Jane, my cleverest and most inspiring critic, about whom I do not have words to say enough. Her insight and her passion for ideas have been vital to this book, as to everything I write.

S.K.B. Asante Senior Regional Adviser,

Economic Cooperation and Integration, ECA-Multidisciplinary Regional Advisory Group,

Cabinet Office of the Executive Secretary November 1996